Why
house prices will continue to rise in the coming months?

17. septiembre 2016

The average price of housing rose 7.5% between January and June, according to the latest data from the Association of Registrars, and everything points to
maintain this positive trend until the end of the year due to the good tone ON residential demand, with next sales increased to 16%. This improvement is based on several factors, according to the
BBVA Bank Research Group:

- The Spanish economy managed to generate more than 200,000 jobs through June, which favours greatly real estate sales.

- The consumer expectations also help: "While optimism about the future state of the economy seems to be moderating, however is widely known that house price
has not only touched bottom but will continue in its path of gradual growth in the next months, which would encourage homeownership, especially those who want to replace their homes or wants to
purchase for an investment," says the study.

- In addition, "the data on tourism in Spain point to a new all-time record this year, which will surely keep the good tendency of foreign demand."

- On the other hand, "we must take into account that financial conditions remain very favourable for buyers". Mortgage rates for new operations continued at
record lows, standing at 2.32% in June and in the first six months of the year a total of 98,435 new mortgages were granted, 27% more than in the same period last year according to the General
Council of Notaries.

The Colleges of Architects are registering more new build projects.

The revival of the housing market is reflected in a significant increase in the registration of new building projects at the Colleges of Architects. Thus
building licences to start new houses grew 49.8% annually to May.

As a result, despite the sharp fall in public works, employment in construction increased almost 13,100 people in the first half, up 1.3%. In addition, the
opinion of entrepreneurs on the future of the sector has also turned out positively over the past two months.

A positive outlook

Thus, "job creation resulting from increased economic growth, advance credit in a context of financial stability and changing expectations about the sector
justify sales growth and the initiation of housing in the first half of 2016 "according to this BBVA Research Group.

And in the second half of 2016, the BBVA expects the residential sector continue to advance, relying "on demand growth and the gradual absorption of the
oversupply of housing, which augurs the end of the year with a notable growth, albeit from relatively low levels."

The report concludes that increasing sales in an environment of shrinking supply "predicts that the price will continue to show a growth trend in global terms
in the coming quarters," although price increases will be concentrated in certain areas, and that "the geographical heterogeneity will remain present in the Spanish property market."

Where has housing prices increased the most?

Real estate prices are rising throughout Spain but there are important differences between some regions and others. The price continues to rise and the highest
annual increases occurred in the second quarter in the Community of Madrid, with 7.8%; Melilla (5.9%); Catalonia (5.5%); Baleares (5%) and Ceuta (4.2%).

The rest of the communities recorded increases below the national average.

Where housing prices rise less was in Navarra -0.1% in the second quarter, Castilla y León (0.5%), Castilla-La Mancha (0.6%) and Asturias (0.7%) .

Where are the more moderate increases?

The price of housing over the past year has continued to grow in all regions, although the pace of increases is moderated in all of them, especially Canary and
Balearic Islands, and only in the Basque Country has kept prices unchanged.

This is stated in the Price Index for the second quarter of this year Housing and published today by the National Statistics Institute (INE), in which it is
noted that the average price of housing in Spain moderated its growth in the second quarter the year to 3.9% increased by 6.3% in the first trimester, although are still growing in ninth
consecutive quarter.

The Index in the annual numbers shows that only in the Basque Country the price of housing continues to grow at the same rate twelve months, 2.8%.

The accused rising price of housing slowdown occurs in the Canary Islands where passes from a 5.9% in the first quarter to 1.9% increase in the second and in
the Balearic Islands, where passed from an 8.8% to a 5% increased.

All in all it seems an optimistic outlook (at last) for those who are trying to sell their properties.